The peak of oil is coming fast, says all experience. Worldwide discoveries fell off a cliff
in 1985 and have been well below consumption ever since. Both British and Norwegian
production in the North Sea has peaked. Mexico's Cantarell field has peaked. Even
Kuwait's biggest field has peaked. Saudi Arabia's Ghawar field, biggest in the world,
is rumored to be pumping 80% water and can't be far behind. What's going to happen?

The executives of oil companies and rulers of the oil oligarchies may have very narrow
expertise and large blind spots, but they are not stupid. They know their own business
very well. We can expect them to take actions which increase their return on investment
and keep them relevant for as long as they can.

Saudi Arabia is a big case in point. It produces about half its output from just
one oil field. Its remaining fields are either small, yield heavy/sour oil, or both.
These heavy-oil fields include Safaniya. The lack of demand for this heavy oil (which is
not easily processed in conventional facilities) has caused the Saudis to look at refining it
themselves and selling product instead of crude.

This would be a very profitable move, but also more than that. It would allow the Saudis
to extract billions more barrels of oil from their light/sweet fields like Ghawar.

One of the problems with the refining of heavy, sour oil is that it is involved and
expensive. I gather that the coking, hydrocracking, hydrodesulfurization and other
processes expend a considerable amount of the crude. Perhaps the best method is to
gasify the oil, scrub it of contaminants, and synthesize only the desired hydrocarbons via
Fischer-Tropsch or other processes. The resulting fuels can be made to
order: ultra-low sulfur, low aromatics, tailored vapor pressure, high octane/cetane,
even synthetic methanol and ethanol. These would command top dollar.

Both hydrogen production (for cracking and desulfurization) and gasification processes
convert part of the input into carbon dioxide, which is not a feedstock for fuels and must
be removed. Other processes also generate carbon dioxide; all the gas-fired desalination
plants, powerplants and future gas-to-liquids plants will make plenty. In most of the
world this is just a waste product, but in Saudi Arabia, carbon dioxide would be
a valuable substance. The injection of water to maintain pressure is a danger to the oil
fields; water isolates the immiscible oil in pores in the rock and prevents it from flowing
to the wells. But what if the injected liquid wasn't an immiscible fluid, but a solvent?

Supercritical carbon dioxide is a solvent for many things; it is being used as a clean replacement
for chlorinated dry-cleaning fluids. It also mixes with at least some types of crude oil
and makes them more fluid. CO2 from a synfuels
plant in N. Dakota is being piped to an oil field in Weyburn, SK. The injection of
carbon dioxide has already raised the production of the field to more than 2/3 of its former
peak (production graph), and is
projected to greatly increase its ultimate recovery. Applying the same techniques to a
field like Ghawar could increase its total production by tens of billions of barrels. At
future prices, that could amount to trillions (that's trillion with a T, 1012) of
dollars of product.

The same techniques could be applied to old fields in the USA; Pennsylvania and the
band from Texas through Kansas have plenty of oil in the ground that's unrecoverable with
previous techniques. Pumping captured CO2 (available from any coal-fired
powerplant converted to IGCC, and there are plenty of powerplants in Ohio) into the ground
could bring up a lot of that, and both cut net carbon emissions and soften the production
declines that are coming. Unfortunately, I don't see this happening here. The
vision doesn't exist; the electric utilities aren't interested in oil and will stonewall
anything that looks like carbon emission limits, the oil companies
see no money in reviving fields they no longer own and may already have paid to cap, and
there's nobody like a T. Boone Pickens ready to put them together for his own profit.

In the end, the most effective palliative to oil depletion may wind up disused except by
accident; the Weyburn Option may mostly be exercised by one of the least sophisticated
and innovative societies on earth. The trillions they reap from it will not be used
to push us forward, but to bring the whole world back to the 7th century AD.

I'm normally an optimist, but that's one all-too-likely future that seems mighty ugly.

Thanks for the post...that is fantastic info! I'm a bit confused by your pessimism. I don't understand the full cycle economics, but i would think that this type of recovery is a function of the price of crude...correct? It would be helpful to understand the breakeven long-term crude price that makes this process viable.

The revenue is a function of the price of crude, but I suspect (not an economist) that the drivers would be the price of CO2 (especially if it's negative due to carbon taxes) and overhead. The KSA owns everything and has no regulatory hoops to jump through, while the USA has many land owners to be dealt with for pipelines and fields to be re-opened, environmental assessments for processes and no doubt other things I've not even heard of.

That's probably why this happened between N. Dakota and Saksatchewan; the field was still active and the area is lightly populated so there are relatively few land owners to deal with.